Dow Jones futures will begin trading on Sunday night, along with S&P 500 futures and Nasdaq futures.
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Stock markets had a mixed week with disappointing results. The major indexes initially rose but hit resistance, with the Nasdaq leading the decline on Friday. Meanwhile, market breadth was weak. The Russell 2000 has reversed and fallen toward its 2023 lows. Technology industry leaders got off to a strong start, but then fell back, sometimes violently.
All of these were disappointing expectations for the market’s rise. With the market rebound sluggish and earnings season in full swing, investors should be cautious about new purchases. Selling your recent purchases may be warranted.
tesla (TSLA) is set to report its worst earnings in two years, but TSLA stock is holding up as bulls look to the potential for future growth engines.
ram research (LRCX) and ASML (ASML) Chip equipment maker with large customers kicks off performance taiwan semiconductor (TSM) has also been reported. ASML stock is struggling, but just like LRCX stock, major chip gear companies are also struggling. applied materials (Amat), KLA Co., Ltd. (KLAC) is being set up.
major oil service company S.L.B. (S.L.B.), energy stocks show new strength and start energy gains. SLB stock is nearing early entry.
In addition to Tesla stock, Lam Research, Applied Materials, KLA and SLB, investors should also keep an eye on tech leaders Arista Networks (ANET), adobe (adobe) and Nvidia (NVDA).
Nvidia, Tesla, and Arista Networks stocks are on the rise IBD Leaderboard. Nvidia, Adobe, and Tesla stock prices IBD50. ADBE stock, Tesla, Nvidia, SLB are on the rise IBD big cap 20.
lululemon athletica (Lulu) will be added to the S&P 500 index before the start of trading on Wednesday, S&P Dow Jones Indices announced late Friday. LULU stock rose after hours.
Dow Jones futures today
Dow Jones futures, along with S&P 500 futures and Nasdaq 100 futures, open at 6pm ET on Sunday.
Please note that overnight trades such as Dow futures do not necessarily translate into actual trades in the next regular stock market.
IBD experts analyze leading stocks and markets on IBD Live.
Breaking expectations for stock market rise
Stock market gains started the week on a strong note, helped by lower U.S. Treasury yields, extending gains from the Nasdaq’s Oct. 6 follow-through date. However, the major indexes stalled due to the Treasury’s violent movements, and the underlying market movement remained weak.
In last week’s stock market trading, the Dow Jones Industrial Average rose 0.8%. The S&P 500 index rose 0.45%. The Nasdaq Composite fell 0.2% after Friday’s 1.2% decline.
The Nasdaq broke above the 21-day line and then the 50-day line, but fell back below these key levels by the end of the week. The S&P 500 also ended below its 21-day average. The Dow Jones has repeatedly hit the 200-day resistance line.
The Russell 2000 tried to regain its steeply fallen 21-day line, but it reversed, dropping 1.5% for the week, and ended at a six-month low.
Invesco S&P 500 Equal Weight ETF (RSP) rose 0.2%, but it still fell back from the 21-day line.
Major tech stocks showed some bullish moves, but then fell back. Some energy and pharmaceutical stocks fared well. Insurance companies, along with some other financial industries, are doing well.
The 10-year U.S. Treasury yield fell more than 15 basis points to 4.63%, but the day-to-day fluctuations were wide. In particular, the US dollar extended its long weekly winning streak.
U.S. crude oil futures rose 5.9% for the week to $87.69 per barrel. Friday’s 5.8% rise was the biggest single-day gain in six months. Gasoline futures rose 3.3% for the week and 4.6% on Friday. Fighting between Israel and Hamas triggered Monday’s rally, while tougher U.S. sanctions on Russian oil fueled Friday’s rally.
Overall, the stock market rally has shattered expectations. At Wednesday’s close, the Nasdaq was above its 50-day line, and further gains were expected as major stocks confirmed the uptrend and showed positive moves. Instead, the market posted a sharp decline in the second half of the week.
There is one positive point. The CBOE Volatility Index, a gauge of market fear, rose on Friday, nearly surpassing its recent five-month high. As fear levels reach new highs, the likelihood of a rebound increases.
ETF
Among growth ETFs, Innovator IBD 50 ETF (FFTY) It fell 0.5% last week. iShares Enhanced Technology Software Sector ETF (IGV) rose 0.2%, but remained well below its high. VanEck Vectors Semiconductor ETF (SMH) ended almost flat after falling 2.5% on Friday. Nvidia and TSM stocks are big holdings in his SMH, with LRCX, ASML, AMAT, and KLAC also being big components.
ARK Innovation ETF (Arkku) It fell 3.7% last week, its lowest closing price in five months. and ARK Genomics ETF (arcg) fell 4.4%, hitting its lowest since the coronavirus lows of March 2020. Tesla stock is the No. 1 holding among Ark Invest’s ETFs.
SPDR S&P Metals & Mining ETF (XME) It fell 0.7% last week. Energy Select SPDR ETF (XLE) rose 4.5%, while the Healthcare Select Sector SPDR Fund (XLV) rose 0.1%, a significant increase. Industrial Select Sector SPDR Fund (XLI) rose 1%, but also fell below its high.
Financial Select SPDR ETF (XLF) rose 0.5%, while the SPDR S&P Regional Bank ETF (KRE) fell 1.6%.
Top 5 Chinese stocks to watch right now
tesla revenue
Tesla’s financial results are expected to be released Wednesday night. Analysts have been lowering their estimates for the third quarter throughout the year, with further cuts following weak third-quarter deliveries from major electric vehicles. Wall Street now expects earnings per share to decline 30% to 73 cents, which would be the lowest EPS in two years. Revenue should be up 10% year over year, but down compared to the second quarter. As prices continue to fall, gross profit margins are expected to decline further.
However, the focus will likely be on Tesla’s earnings release. Investors will be looking for positive signals in gross margins, especially as prices continue to fall in October. You’ll also want to know more about Cybertruck, including its release date. They also want to know hints about other potential growth drivers.
After fending off a series of bad news, Tesla stock fell 3.6% last week to 251.12, testing its 50-day line on Friday. The base of the stock is 278.98 on a cup base with handle. Investors may use the October 10 high of 268.94 as an early entry.
tip income
ASML’s financial results are expected to be released early Wednesday. Analysts expect the Dutch semiconductor equipment giant to see EPS decline 1% and sales rise 7%.
Lam Research’s results will be released on Wednesday night. EPS should decline by 41% and revenue by 30.5%.
Taiwan Semiconductor’s financial results will begin in earnest early Thursday morning. The foundry giant, which makes chips for Nvidia, Apple and many others, is seen reporting a 35% decline in EPS and a 14.5% decline in revenue. Taiwan Semi’s guidance and capital investment plans will be key for this sector, especially for chip equipment makers.
ASML stock rose 0.4% last week, trying to break a three-month decline, but remains below key levels. TSM rose 1.3% last week to 90.46, regaining the 50-day and 200-day lines on Thursday but falling below Friday’s levels.
LRCX stock rose 2.7% to 645.12, but fell below its 50-day line on Friday. Lam Research has a buy point of 711.91 on a double bottom basis. Investors can use a move above Thursday’s high of 655 as an aggressive entry, with the trend line likely entering near 685.
Meanwhile, Applied Materials and KLA stock prices will not be announced this week, but both companies are doing well.
SLB revenue
SLB, formerly known as Schlumberger, reported Friday morning. Analysts expect SLB’s earnings to rise 22% and sales to rise 17.5%. Both will face tougher comparisons and slower growth in the second quarter.
The SLB results and guidance will be important for the energy sector, particularly for leading service companies, drilling contractors, and the machinery industry.
SLB stock rose 5.8% last week to 58.96 and regained its 50-day line on Friday. The trend line currently near 60.50 would provide an early entry into an emerging flat base.
Up-and-coming stock
Other hot stocks to watch include Nvidia, Arista Networks, and Adobe.
Nvidia stock fell 0.7% last week to 454.61 and was down 3.2% on Friday. The AI chip giant has a buy point of 502.66 on a cup basis. At the beginning of the week, NVDA stock saw a likely positive entry. For now, investors should focus on traditional entry or see if NVIDIA stock can take the wheel. The relative strength line, which measures stock performance against the S&P 500, has hit new highs on the weekly chart.
A sharp decline in Nvidia stock would bode poorly for the market rally.
ADBE stock rose 4.2% this week to 548.76, briefly above the flat buy point of 570.24. This entry is still viable, but a simple reason could be constructive. The RS line is at a high price.
ANET stock fell 2.15% to 189.85, but found support at its 50-day line. According to MarketSmith, the stock is not far from a buy point of 198.70 from a flat base. This is part of the base-on-base pattern. The RS line is near the high.
Timing the Market with IBD’s ETF Market Strategy
what to do now
The stock market is still trending higher, but there are some worrying signs. We need to maintain the status quo and make some progress soon.
The Nasdaq and S&P 500 need to improve their breadth and decisively clear the 50-day line. That will likely coincide with many new purchasing opportunities. Therefore, investors should have a watchlist in place. Focus on stocks that exhibit relative strength.
However, if the market shows further deterioration, investors should consider scaling back. Some promising stocks fell sharply late in the week, already triggering sell signals.
So stay engaged and remain flexible.
Read The Big Picture every day to stay on top of market direction and key stocks and sectors.
X/ Follow Ed Carson on Twitter. @IBD_ECarsonthread of @edcarson1971 and in the blue sky @edcarson.bsky.social The latest information on the stock market, etc.
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